The majority of your
profits come from a minority of customers. It is widely said that, on average, 20%
of a company’s customers account for 80% of its Revenue.
That alone is reason enough to reflect on the importance of retaining your best customers.
Another key figure: a 5% increase in customer loyalty can boost
a company’s profits by 25 to 55%.
1. Retaining customers costs less than acquiring new ones.
The cost ratio between retaining an existing customer
and acquiring a new one is estimated at 1 to 3.
As for winning back a dissatisfied customer, the gap is even more striking. The cost is said to be
12 times higher when trying to rebuild a dissatisfied customer’s trust
compared to simply satisfying them from the start.
Focusing on customer loyalty also means increasing
the sources of satisfaction for your customers — and vice versa.
2. Customer loyalty to protect your reputation
Dissatisfaction spreads further than satisfaction. On average, a very satisfied customer
tells only 3 people, while a very unhappy customer tells 20.
What’s more, it is difficult to identify the root causes of customer dissatisfaction,
as most unhappy customers simply leave without explaining why.
In fact, 3 out of 4 negative experiences have nothing to do with the product itself —
but rather with the customer-seller relationship, after-sales service, delivery, or the feeling of not being valued.
Our recommendations
for a successful loyalty strategy:
1- Work to turn every customer into a satisfied one,
2- Seek to understand their expectations,
3- Turn them into brand ambassadors for your brand or business,
4- Invite them to refer new customers.
Would you like support
with your customer loyalty strategy? Avomark offers turnkey loyalty solutions
tailored to every type of retail business. Contact an expert.
